U.S. Machine Tool Consumption to Hit $7.7 Billion in 2019

Gardner Intelligence, the research arm of Gardner Business Media, has released the 2019 Capital Spending Survey, which projects accelerating growth for the machine tool market next year. In it, Gardner Intelligence sees machine tool consumption increasing 11 percent to $7.748 billion in 2019, following smaller growth in the preceding two years. In 2018, machine tool prices rose, and delivery times lengthened, a trend that is likely to continue given the planned spending by machine shops detailed in the report.

Gardner Intelligence is forecasting an 11-percent increase in U.S. machine tool consumption in 2019. This represents a $7.7 billion increase, with smaller manufacturers driving growth.

Significant Spending Trends

In 2019, job shops are projected to spend roughly $2.2 billion on machine tools, more than twice as much as any other end market. The machinery/equipment and automotive end markets plan to spend roughly $1 billion apiece next year. Job shops, machinery/equipment and automotive, which are the top three industry end-market categories, will account for approximately 60 percent of machine tool consumption. Planned spending in aerospace, pumps/valves/plumbing products, electronics/computers/telecommunications and forming/fabricating (non-auto) industries should slightly exceed $400 million. These seven industries combined are projected to consume nearly 80 percent of all machine tools purchased in 2019.

This year’s Capital Spending Survey also projects increased spending on every one of the six major machine types tracked by the survey. Growth in turning-equipment spending is highest with a projected increase of 56 percent. The full report provides a complete breakdown of machine sales by machine type, plant size, region and industry. Regionally, the biggest surprise is the Southeast. Shops in the Southeast plan to spend nearly $1.2 billion on machine tools in 2019, more than 50 percent higher than any previous year for the region. The region’s increased spending is due to very large increases in Aerospace and Automotive spending.

World Machine Tool Survey

Another Tool from Gardner Intelligence

Gardner Intelligence also conducts the World Machine Tool Survey, an independent annual survey that collects statistics from machine tool consuming and producing countries and compares them in real U.S. dollars. The 52nd edition of the survey was released earlier in 2018, and it contains data on production, imports, exports and consumption collected from more than 20 countries. Also, actual imports and exports were included for every country that imported at least $100 million of machine tools in at least one year since 2001. Production and consumption were estimated for those countries.

Small Shops Drive Growth in U.S. Machine Tool Market

But what is driving the accelerating growth, higher prices and longer delivery times of machine tools? A good place to start is with the old economics maxim: “Prices are set at the margin.” For the machine tool industry, the marginal buyer is best identified by facility size, as small shops typically buy sporadically and only when they have cash or profits to spend.

In 2019, shops with 50 to 99 employees and those with fewer than 20 are projected to spend more on machine tools next year than any other year in the last decade, and they will probably spend more than any other year in the past two decades. Therefore, these smaller shops are projected to drive the machine tool market to its highest level since 2000.